"Regulatory return" – that's the phrase Chemical Week's editor used to describe the EPA and the legislative branch's movement forward on regulations. With signs the recession is easing and growing pressure to respond to climate change, we agree that regulations are going to be high on everyone's agenda.
For the chemical industry, that includes the Toxic Substances Control Act (TSCA), Chemical Facility Anti-Terrorism Standards (CFATS), and the Clean Air Act, as well as environmental sustainability issues in general. Many of these regulatory efforts are moving ahead. Earlier in October, chemical manufacturers, consumer product goods companies, governmental representatives and NGOs came together to discuss the future of U.S. chemical policy, including TSCA. (See EPA Administrator Lisa Jackson's presentation as she shared the Obama administration’s principles for modernizing the federal TSCA.)
Progress is also being made with CFATS, but the American Chemistry Council (ACC) issued a statement that underscores the industry's lingering concerns over regulations in general: "While we were able to reach agreement on many important concerns – including meaningful roles for employee and union representatives, employee training requirements, and unannounced inspections – we continue to seek common ground over what authority should be granted to the government when it comes to requiring process changes or product substitutions." (Check out the ACC's tracking of CFATS.)
The larger issue is the EPA's awkward role of interpreting the Clean Air Act and imposing business costs, without the legislative process. Unfortunately, the EPA is the current regulatory option for climate change regulation, carrying what some have called "a cascade of unintended regulation". Without a legislated regulation, the EPA is going to take a larger role in climate change regulations with mixed consequences. Skepticism remains high that the legislative option is a realistic one, but a preference for legislation is one echoed by many.
Carol Browner, the Obama Administration’s assistant to the president on energy and climate change, supports climate change legislation (instead of the EPA's expanding role). Browner stated, “We need to give the businesses the kind of predictability and certainty so they can make the capital investments that are going to get us the kind of reductions we need. That is best done through legislation.”
An October 10th op-ed piece in the New York Times entitled "Yes We Can (Pass Climate Change Legislation)" by Senators Graham (R – SC) and Kerry (D – MA) urged the passage of cap-and-trade legislation.
And one more strong example of increasing confidence in legislation comes in an open letter to President Obama and Congress from the We Can Lead coalition. The letter states "We support legislation because certainty and rules of the road enable us to plan, build, innovate and expand our businesses".
Despite the fact that mixed signals are being sent from some manufacturers, we think legislation is a positive step forward. Our sustainability research has shown that companies believe they have the data they need when it comes to sustainability and climate change. What they need now is to know what to do with the data they already have, what data they still need, and how to analyze all of their data to make the right decisions to carry their businesses forward. I think legislated regulations will help.